Buying a house with poor credit?

Question

We are looking to buy a house in the near future -- problem is my credit isn't so hot and neither is my husband's. (His is better than mine.) What are the steps that we need to take? Paying rent is ridiculous at this point and we just want something of our own.

Answer 1

While paying rent is really throwing good money out the window, in today's mortgage environment, you may not have any other choice. What I suggest is to contact several lenders in your area and have them prequalify you now. This will tell you how bad it is, or maybe even surprise you!

But please, don't use an internet company. Here today, gone tomorrow. And if something goes wrong you want to be able to walk into their offices and have it taken care of. The internet companies would be hard to even get on the phone.

But please use some common sense, seek professionals for advise on your financial situation and future.

Best Wishes from Minnesota!

Answer 2

The mortgage marketing is changing and you really need to work on your credit AND save some money up. This also depends on exactly how bad your credit is.

I have heard good things about two credit repair companies - www.lexingtonlaw.com and www.armorcreditservices.com - you could try them.

But keep in mind, you CAN clean up your credit yourself - if you are organized and diligent.

Basically, you will need to start by getting a copy of your credit report from all 3 of the major companies - Experian, TransUnion, and Equifax. Check them for errors. If you find errors, follow their guidelines for disputing the information. Everything must be in writing. You also need to follow up on the issues that you dispute. The credit reporting company has 30 days to verify the information. If they can't verify it in that amount of time, they need to drop it from the report - EVEN IF IT IS TRUE. But you will have to keep on top of this to make sure they DO remove the information after 30 days.

Some people even dispute things that are not mistakes - because there is a chance that maybe the credit reporting company won't be able to verify the information in the 30 day time limit.

You also want to close any credit card accounts that you don't use or don't need. You need to pay your bills on time and try to pay them down.

Then you need to start saving some money for a downpayment, earnest money, inspection, appraisal, moving truck, and other miscellaneous costs associated with buying a home.

This is a good time to buy because prices are falling in most areas, but on the other hand, credit is getting tighter for people in your situation.

Good luck - I hope this helps.

In the interest of full disclosure - I am a REALTOR®

Answer 3

While the housing market is in such flux, work on fixing your credit. Make sure all your current debt is paid on time. Pay down credit card balances below 30% of your available limit -- paying in full is even better.

Get a copy of your credit report and look at the negatives. Take them one by one and negotiate settlement -- a paid negative is better.

Also, start saving money for a downpayment. Open an account and deposit a set amount every week.

Owning a house can be expensive. Lots of unexpected maintenance and repair. It's best to buy less house and have some money left over to deal with problems.

Answer 4

you can start by trying to improve your credit. Stop buying stuff. Take a break from spending alot of money and buy only things really necessary. By doing so, you can save money. Pay off some debts/bills. Your credit could improve, and you could get better rates and buy a new home.

Answer 5

you will pay a higher interest rate', but you can get it back on your tqax return.
then pay all your bills on time for 3 years and your score will improve. then refinance the house at a lower rate.
be patient this will take time.

Answer 6

buy a mouse fiert then a house.